Tests for determining the "arbitrability" of Taylor Law contract provisions

Tests for determining the "arbitrability" of Taylor Law contract provisionsOdessa-Montour CSD v Odessa-Montour Teachers Asso., 271 AD2d 931 The Odessa-Montour decision by the Appellate Division, Third Department applied the guidelines set out in the Court of Appeal's ruling in Watertown City School District v Watertown Education Association, 93 NY2d 132. Watertown addresses issues involving demands for arbitrating alleged violations of Taylor Law agreements. The ruling also suggests that Watertown may not be as much of a closed door to obtaining a stay arbitration involving grievances arising from alleged violations of Taylor Law agreements as some may believe. In Watertown the Court of Appeals held that any anti-arbitrational presumption implied by its previous ruling in the Liverpool case, [Liverpool Central School District v United Liverpool Faculty Association, 42 NY2d 509], is no longer justified in the public sector labor environment. In applying the Watertown ruling in deciding Odessa-Montour, the Appellate Division signaled that Watertown does not mean that every grievance flowing from alleged violations of Taylor Law agreements are automatically arbitrable. The Appellate Division explained that the Court of Appeal's decision in Watertown indicates only that the anti-arbitrational presumption is no longer valid — two tests must still be met: 1. The court must be satisfied that the Taylor Law authorizes arbitration of the particular subject matter; and 2. The parties agreed by the terms of their particular arbitration clause to refer such matter to arbitration. Unless both tests are satisfied, courts retain authority to issue a stay of arbitration pursuant to Section 7503 of the Civil Practice Law and Rules. How did the Appellate Division apply these tests in resolving the Odessa-Montour appeal? The decision indicates that when Jerry Burris retired from his position with the Odessa-Montour Central School District he decided to terminate his individual health insurance coverage in the district's health insurance plan. Upon his retirement, Burris' spouse, who was also employed by the district, enrolled him for dependent coverage under her health insurance coverage. Seven years passed. Burris' spouse requested, and was granted, a leave of absence without pay from her position with the district. Burris asked the district to re-enroll him once again in its health insurance plan — with individual coverage. The third party plan administrator, however, denied the request because Burris had waived his right to individual coverage in favor of dependent coverage at the time of his retirement. The Odessa-Montour Teachers Association [Association] filed a grievance, contending that rejecting Burris' request for re-enrollment in the plan constituted a violation of its Taylor Law contract. Eventually the Association submitted the grievance to arbitration in accordance with the contract grievance procedure. The district objected and filed a petition pursuant to Article 75 of the Civil Practice Law and Rules seeking an order barring the submission of the matter to arbitration. State Supreme Court Justice Samuel J. Castellino granted the stay. The Association appealed, arguing that the district had agreed to arbitrate the issue of a retiree's ability to change his or her health insurance enrollment. It made the following arguments in support of its claim: 1. The Taylor Law agreement allocates the costs of health insurance premiums between district and its retirees. 2. A clause in the agreement refers to the health insurance administrative manual and thus makes the health plan administrator's decision to deny Burris re-enrollment … is subject to arbitration. 3. The contract defines the term grievance as a claim by any teacher or group of teachers that there is a violation, misinterpretation, or misapplication of this Agreement and the district concedes that retirees are included in the definition of teacher within the meaning of the collective bargaining agreement. 4. The collective bargaining agreement contained a broad arbitration clause. The Appellate Division said that the question presented to the court to resolve is whether or not the parties agreed to arbitrate the issue. The court said that [i]n light of the narrow arbitration clause in the collective bargaining agreement at issue and Burris' status as a seven-year retiree who voluntarily opted out of health insurance coverage at the time of retirement, we agree with Supreme Court's ruling that the subject dispute is not subject to arbitration under the parties' collective bargaining agreement. Referring to Watertown, the Appellate Division observed that when considering a dispute as to whether a particular grievance is outside a collective bargaining agreement, a court should merely determine whether there is a reasonable relationship between the subject matter of the dispute and the general subject matter of the [collective bargaining agreement]. Its conclusion: no reasonable relationship exists between the subject matter of the instant dispute — a retiree's attempt to re-enroll in a health insurance plan, which he voluntarily opted out of seven years earlier — and the general subject matter of the collective bargaining agreement. .

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